The chances of the Bank of England launching another round of quantitative
easing next week have retreated after two policymakers suggested the UK’s
monetary stance is already loose enough.

Spencer Dale, the Bank’s chief economist, said policy is “very stimulatory” and Ben Broadbent, an external member of the rate-setting Monetary Policy Committee (MPC), argued that inflation is not falling fast enough to justify more money printing.

The Bank has made it clear that it is ready to respond to an escalation in the eurozone crisis with emergency measures, which would almost certainly include more QE.

However, Mr Dale and Mr Broadbent suggested that the Bank would be unlikely to restart the presses unless the crisis struck.

“Monetary policy at the moment is very stimulatory,” Mr Dale told BBC Radio Scotland. “We have undertaken a large amount of quantitative easing and that will continue to flow through the economy.”

To aid recovery, the Bank has pumped £325bn into the economy in two separate QE programmes, as well as slashing rates to 0.5pc. However, in recent months its focus has shifted back to inflation, which has proven to be more “sticky” than forecast.

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“We still anticipate a decline [in inflation], but it looks to be taking slightly longer than we had first thought it would,” Mr Broadbent told Bloomberg Television. “My answer to the questions as to why policy didn’t change in May – the forecast didn’t warrant it.”

Mr Dale said: “We expect to see a gradual recovery in growth this year. We have seen inflation drop from 5pc to 3pc, but we need to get it down further. The case for QE going forward will be affected by the balance of those two risks.”

Their comments put them at odds with David Miles, the one MPC member who this month voted for more QE. The meeting’s minutes, though, had raised the prospect of more QE in June. They said that the decision was “finely balanced” for a number of MPC members other than Mr Miles.

The International Monetary Fund last week urged the Bank to restart QE in June and consider a rate cut. Mr Broadbent said the Bank has decided against cutting rates further because of the effect on bank margins. “It’s not clear all the effects are beneficial,” he said. “So that’s why the MPC has thought about this and decided against it.”